Oman Flour Mills issues Sultanate’s first Islamic Commercial Paper, raising US$26M
The ICP issuance was met with robust market interest and was oversubscribed by 1.4 times, a clear indication of investor confidence.
OMAN – Oman Flour Mills (OFM) has successfully issued the Sultanate’s first-ever Islamic Commercial Paper (ICP), raising OMR 10 million (US$ 26 million) through a 365-day Sharia-compliant liquidity instrument.
The issuance, which marks a significant advancement in Oman’s capital markets, was structured by Ahlibank’s Investment Banking Division, with Ahli Islamic acting as both the Sharia-structuring advisor and Investment Agent.
The ICP issuance was met with robust market interest, attracting strong demand from institutional investors such as pension funds, money market funds, and Islamic banks, and was oversubscribed by 1.4 times, a clear indication of investor confidence in both the instrument and Oman’s evolving Islamic finance landscape.
The proceeds from the ICP will be directed toward financing the working capital needs of Oman Flour Mills, providing a competitive short-term funding solution in line with Islamic financial principles. This aligns with OFM’s strategic goal of diversifying funding sources while adhering to financial sustainability and Sharia-compliant practices.
Haitham Al Saadi, CFO at Oman Flour Mills, hailed the transaction as a milestone in the company’s financial evolution.
“The successful issuance of Oman’s first Islamic Commercial Paper is a significant milestone for Oman Flour Mills as we continue to optimise our liquidity management through Sharia-compliant financing solutions. This transaction enables us to access competitive short-term funding while supporting the development of Oman’s Islamic capital market.”
This landmark deal highlights the role of Islamic Commercial Papers in bridging the gap in short-term corporate financing, offering high-grade corporates an alternative to conventional borrowing and promoting financial inclusion.
Speaking on the broader significance of the transaction, Hanaa Al Kharusi, Senior General Manager – Wholesale Banking at Ahlibank, emphasized the bank’s commitment to structuring innovative Islamic financial solutions:
“Our goal is to drive financial inclusion, expand market opportunities, and support the nation’s economic diversification. This achievement paves the way for further advancements in Sharia-compliant financial instruments, positioning Oman as a dynamic hub for Islamic finance.”
The ICP not only provides Oman Flour Mills with optimized liquidity management but also sets a precedent for future issuances, signaling growing investor appetite for Islamic financial instruments and a shift toward more diverse, ethical, and inclusive financing methods in the region.
With this pioneering initiative, Ahlibank has reaffirmed its position as a leader in Islamic capital market development, and Oman has taken a significant step forward in becoming a regional center for Islamic finance innovation.
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